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Today, Larry Berman CFA, CMT, CTA and Gerard Ferguson commented about whether EVRI-N, BYD-T, WPM-T, CTST-Q, CFP-T, ATS-T, BB-T, PSK-T, BTE-T, CIA-T, BYL-T, KXS-T, AC-T, MFC-T, FIRE-X, BIP.UN-T, STC-T, NFI-T, KL-T, WORK-N, WORK-N, ATRL-T, ZPW-T, CCO-T, ZHY-T, FLOT-N, ZPH-T are stocks to buy or sell.

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COMMENT

He respected Larry Fink, CEO of Blackrock, until he tweeted over the weekend that the ECB needs to buy stocks in order to stimulate the economy. This blows his mind, makes no sense. The Wall Street elite is saying, keep fuelling the stock market with liquidity. Japan tried this strategy and it has not worked; their GDP growth rate remains weak and flat. Fink is saying, Let's do more of what isn't working. In fact, it will drive up an asset bubble. Terrible, terrible policy.... Interest rates will stay low for a long, long time and this will stimulate the market and create a bubble.

Unknown

COMMENT

ZPH and ZPW in a recession? He was a big fan of these put-write strategies--to write puts on the best companies on the market--when they launched, but they have since failed to execute this plan. He still holds these for the yields, though, because it provides an alternative source of yield. In a recession, it depends on how fast the markets go down. There is an embedded protection in these ETFs, giving you only half the downside. With these, you place a put, but don't own the companies, but rather harvest the yield off the option premium.

E.T.F.'s

SELL

You previously recommended it. Floating rate notes protect you as interest rates rise; the capital loss is embedded in the nominal bonds. However, if rates decline as they are now, this turns against you. Sell as the Fed cuts rates. He has sold this in favour of longer bonds. He does change his mind on stocks and ETFs, so don't buy-and-hold something forever.

E.T.F.'s

SHORT

Strategy to hold this forever in a TFSA and RRIF and bought it for the yield. Will this strategy continue to work? It's not actively managed, but tracks a high-yield index. If there's a default, the ETF would kick out that bond. A massive credit bubble is building, and ZHY is a basket of the worst-quality bonds which pays a higher yield. The 5-6% yield is attractive, but this gives you equity-like exposure, so in a downtown this will fall hard, like 25-30%. However, it won't drop as far as market indices.

E.T.F.'s

BUY ON WEAKNESS

Uranium A few years ago, he thought uranium would be THE source of energy, but then Fukushima happened. This sector is challenging, though still tradeable. Cameco's chart is now building a base. Trade the range if you are long-term, if you are hopeful about this sector, but trading on hope is a weak strategy.

integrated mines

COMMENT

Good vs. bad return of capital of an ETF--how to tell the difference? Call the ETF provider. The bad return happens when the underlying assets yield 3-4% but the the ETF pays 6-7%, because you're eroding your capital and they are giving some of your own money back. The good return happens open in the rapid-growth phase of an ETF. It pays the yield equal to what the ETF earned in that growth period as a return of capital. Caveat: there are lots of intricacies, so call the actual ETF company to find out about the distribution in a taxable account. If you're in a registered account, it doesn't matter.

Unknown

COMMENT

Educational Segment. Indicator of oil demand A chart showing the long-term demand for barrels of crude oil: The current YOY growth/demand rate is the lowest since right before the last recession. Currently, oil is being boosted by supply constraints is okay, but it is not ideal. What is best is demand pushing oil prices up. The last few years, oil demanding has been moderating but now it stands at the weakest since the recession. The U.S. is the source of the strongest growth with forecasts of $55-75/barrel. The outlook to 2022-23 will see growing supply as demand is declining, rising from 11 million to 14 million barrels per day. Best-case scenario with the help of technology, then the U.S. could be energy independent by 2040 at 20 million barrels per day, which is current American demand. Also, if the futures curve keeps rising, it will be very interesting for the price of oil. So, he remains an oil bear: sell crude during rallies.

Unknown

COMMENT

He was a big fan of these put-write strategies--to write puts on the best companies on the market--when they launched, but they have since failed to execute this plan. He still holds these for the yields, though, because it provides an alternative source of yield. In a recession, it depends on how fast the markets go down. There is an embedded protection in these ETFs, giving you only half the downside. With these, you place a put, but don't own the companies, but rather harvest the yield off the option premium.

E.T.F.'s

COMMENT

Opening comment The Caisse just reacted very negatively to SNC Lavalin this morning (https://www.newswire.ca/news-releases/caisse-reaction-to-snc-lavalin-statement-823828177.html). SNC's biggest shareholder is losing patience with SNC's management. SNC has been struggling with many issues for a while, but has started address them, like selling their stake in the 407 highway. Now, they are re-evaluing their divisions. SNC has failed to find successful strategies to rescue their business lines and this has failed to stabilize their price, but it hasn't. Caisse want the board to act now, and TD warns that SNC's just-announced strategic direction may not satisfy those fast enough. A strategic review results in selling a division, an entire company or no change at all. Some investors call for cancelling some fixed-price, long-term contracts that risk cost overruns (i.e. steel prices labour costs). There could be job losses in Quebec.

contractors

COMMENT

Trumps' latest tweet calls for cutting interest rates Unfortunately, trading today involves his tweets. His tweets are often conflicting. Trump wants lower interest rates to boost the market, but how many of his voters own stocks? He wants a strong US dollar, but criticizes China for devaluing. Expect more conflicting comments as we head into the 2020 election.

Unknown

BUY ON WEAKNESS

They just went public to a lot of fanfare. Since then, the stock has pulled back, because Microsoft responded with an app, Teams. Slack's software is better than Microsoft's, and many users are already content or ecstatic with Slack. He will add to his position.

Technology

BUY ON WEAKNESS

Technology

BUY

Gold is hot now as interest rates decline. He's bullish in precious metals, and KL is a leader in this space, a go-to name in this gold rally. However, the valuation is a little inflated (the same can be said about the FAANGs).

precious metals

PARTIAL BUY

For an RRSP, even though it's trending down? He used to own it. They were a market darling until they hit weaker markets and execution problems. NFI is still a good company and the yield is attractive, but he's unsure if it will get cut.

Automotive

BUY

A big holding of his in a moderate-growth business. They just made a big acquisition and they grow by acquiring. It is a low-multiple stock and likely will stay low. They execute well.

Telecommunications

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We paraphrase the experts by hand, we watch the shows and write down what we understood from the experts’ comments. We are human and can make mistakes, help us fix any errors. If you see something that you know is not right or if there is a problem with the site, feel free to email us at : hello@stockchase.com.

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